Opposition to Dairy Supply Management Grows

WASHINGTON (PRNewswire-USNewswire) — As the House and Senate Agriculture Committees prepare to write a new Farm Bill this week, the list of organizations opposed to a proposed dairy program continues to grow. Nearly 150 organizations and businesses across the food chain, from farmers and food manufacturers to food retailers and consumers, have signed letters to members of Congress urging them to oppose the "Dairy Market Stabilization Program" (DMSP). This program is designed to raise milk prices by establishing federal regulations to periodically limit the U.S. milk supply when farms are growing.

The DMSP is a controversial proposal that is part of the Dairy Security Act, a bill sponsored by Representative Collin Peterson (D-MN) that is included in drafts of the next Farm Bill. Both the Senate and House Agriculture Committees will consider the draft bills this week.

Consumer groups have expressed concern that the DMSP would "ultimately increase the prices that consumers pay for milk and dairy products," adding that the program would prevent prices from falling while providing no protection from periodic milk price surges. A broad coalition of food manufacturers, grocers, retailers, restaurants, chain restaurants and pizza makers joined with dairy processors in saying that "restricting milk supplies will hurt dairy industry growth, leading to long-term consequences" for the industry.

Twelve conservative organizations have expressed opposition to the DMSP saying that the program would have the federal government "manage both supply and demand for milk in order to keep prices artificially high." The groups added, "Consumers will pay even more for dairy products, government funds will be wasted on dairy purchases, and dairy industry and job growth will be stunted."

Several key dairy farmer organizations also have joined the opposition to the DMSP. California Dairies, Inc., the nation's second-largest dairy cooperative and the largest exporter of milk powder products in the Western Hemisphere, has written that the DMSP "could lead to adverse results for our nation's export efforts." Wisconsin's Dairy Business Association has voiced opposition and the Northeast Dairy Producers Association wrote that the "DMSP would limit farm growth during a time when farms [in New York State in particular] have a demand for our product to meet the needs of our dairy processing plants."

Many of these organizations, including consumer groups, food and restaurant groups, numerous dairy producer groups and dairy food manufacturers, have urged support for the Dairy Freedom Act, a bipartisan, compromise alternative to be offered as an amendment by Representatives Bob Goodlatte (R-VA) and David Scott (D-GA). The Goodlatte-Scott bill would offer an effective safety net program for dairy farmers but would not include the controversial proposal to limit milk supplies and artificially keep prices high. According to the Congressional Budget Office, implementing the Goodlatte-Scott bill would cost slightly less than implementing the Dairy Security Act with the DMSP.

"The truth is that Congress can help dairy farmers without hurting consumers and nearly everyone else up and down the food chain," said Jerry Slominski, senior vice president of legislative and economic affairs for the International Dairy Foods Association. "The Goodlatte-Scott bill would provide an effective safety net to help dairy producers through difficult economic times, yet would cost taxpayers less than Representative Peterson's proposal, and it wouldn't handcuff dairy exports or dairy industry job growth."